PwC: Food security in ASEAN at risk if supply chain disruption continues

dairy products on shelves

There is a growing concern over food security in ASEAN as coronavirus disrupts the already stressed food supply chain in the region, PricewaterhouseCoopers (PwC) said.

It saw an imbalance between supply and demand. The increasing demand driven by rapid urbanization and consumption growth faced a limited supply due to the shrinking of arable land, low yields, aging manpower, and food waste.

“ASEAN faces a number of long-term challenges to its food security… the spread of the COVID-19 pandemic throughout ASEAN and more widely will exacerbate the longer-term issues facing the region’s food system,” it said.

To mitigate the disruption, the report commissioned by Food Industry Asia (FIA) recommended that a concerted effort will be required between corporates and governments to keep supply chains open and minimize disruption to the food system and ASEAN communities.

With government measures to curb the spread of the virus still in effect, the food supply chain is further strained by shortages of input and workers because it is difficult to move people and goods freely.

Moreover, the report mentioned the food and beverage industry relies on other industries for its components and if the production of these inputs is restricted due to being considered as “non-essential”, the food supply chain would suffer.

According to Richard Skinner, Asia Pacific Deals Strategy and Operations Leader of PwC Singapore, “Our discussions with major global food companies suggest that labor restrictions and supply disruption for inputs are the key challenges that the sector is currently facing in ASEAN.”

PwC suggested measures the government can do to secure the supply chain including protection of labor, financial assistance for small businesses, targeted measures for smallholders, preservation of open borders for goods, consumer channel management, and social support for consumers.

The report also recommended businesses should not rely on governments as they can implement their own mitigation plans to protect their workers, customer and supplier, inventory, production flexibility, and distribution.

Governments and businesses should consider lessons learned from the pandemic to build a disruption-resilience supply chain. “Top impacts of the pandemic include changed consumer purchasing habits, increased government focus on food security, and diversification of supplier and customer bases,” PwC added.

The report said the food value chain contributes 17% of ASEAN’s total GDP or around US$500 billion of economic output to the region.

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